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Severance Agreements: Practical Considerations to Minimize Business Disruption

Severance Agreements: Practical Considerations to Minimize Business Disruption. Elizabeth A. Coonan Ann Holden Kendell BrownWinick 666 Grand Avenue, Suite 2000 Des Moines, IA 50309-2510 Telephone: 515-242-2400 E-mail : coonan@brownwinick.com kendell@brownwinick.com.

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Severance Agreements: Practical Considerations to Minimize Business Disruption

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  1. Severance Agreements: Practical Considerations to Minimize Business Disruption Elizabeth A. Coonan Ann Holden Kendell BrownWinick 666 Grand Avenue, Suite 2000 Des Moines, IA 50309-2510 Telephone: 515-242-2400 E-mail: coonan@brownwinick.com kendell@brownwinick.com

  2. Why do we use Separation Agreements? • Minimize Liability and Risk • Serve Business Objectives • Secure Company Assets

  3. Applicable State Laws • IOWA LAWS • Iowa Workers Compensation (Chapter 85) • Iowa Occupational Safety and Health (Chapter 88) • Iowa Wage Payment Collection Act (Chapter 91A)

  4. Applicable State Laws • Iowa Code Section 91A.5A (Veterans Day leave) • Personnel Information (Chapter 91B) • Iowa Civil Rights Act (Chapter 216) • Iowa Wage Discrimination in Employment Act • Iowa Code Section 607A.45 (jury duty)

  5. Applicable State Laws • Iowa Code Section 49.109 (voting) • Iowa Worker Adjustment and Retraining Notification Act (Iowa WARN) • Private Sector Drug-Free Workplaces (Chapter 730.5) • Volunteer Emergency Services Providers Job Protection Act (Section 100B.14)

  6. Applicable Federal Laws • Americans with Disabilities Act (ADA) • Age Discrimination in Employment Act (ADEA) • Consolidated Omnibus Budget Reconciliation Act (COBRA) • Consumer Credit Protection Act (CPCA) - garnishment • Equal Pay Act (EPA)

  7. Applicable Federal Laws • Employee Retirement Income Security Act (ERISA) • Fair Labor Standards Act (FLSA) • Family and Medical Leave Act (FMLA) • Genetic Information Non-Discrimination Act (GINA) • Health Insurance Portability and Accountability Act (HIPAA)

  8. Applicable Federal Laws • Immigration Reform and Control Act (IRCA) • Lilly Ledbetter Fair Pay Act • National Labor Relations Act (NLRA) • Occupational Safety and Health Act (OSHA) • Older Workers Benefit Protection Act

  9. Applicable Federal Laws • Patient Protection and Affordable Care Act (PPACA) • Title VII • The Pregnancy Discrimination Act of 1978 • 42 U.S.C. §1981 (Section 1981) - race

  10. Applicable Federal Laws • Worker Adjustment and Retraining Notification Act (WARN) • Uniformed Services Employment and Reemployment Rights Act (USERRA)

  11. What a Separation Agreement Can Do: • Smooth Transitions • Reduce Liability • Preserve Employee Obligations (Confidentiality, Trade Secrets, etc.) • Secure Continuing Cooperation

  12. What a Separation Agreement Cannot Do: • Terminate Equal Employment Opportunity Commission (EEOC) or Iowa Civil Rights Commission Investigations • Terminate an Employee’s Right to File: • Unemployment Claims • Workers’ Compensation Claims • Wage Claims • ERISA Claims

  13. Consideration • Must offer something of value to which the employee is not already entitled • Balance protections required by the company with the restrictions imposed upon the employee • Address any existing contractual obligations

  14. Structuring the Separation Package • General Release • OWBPA/ADEA Release • Affirmative Acknowledgements • Neutral References/ Agreed-upon Statement • Non-Interference/Non-Disparagement

  15. Structuring the Separation Package • Permanent Employment Separation/No Re-Application • Payout Structure – Salary Replacement, Lump Sum • Benefit Continuation • Outplacement • Remedies for Breach • Jurisdiction, Venue and Law

  16. Negotiating with the Employee • Identify main point of contact • Counteroffers • Extensions of time • Expiration

  17. Practical Issues Involving Transitions • Timing • Messaging/Communications • Managing Work Flow Issues • Updating Records/Contacts • Unemployment • Employee Assistance Program

  18. Website: www.brownwinick.com Toll Free Phone Number: 1-888-282-3515 OFFICE LOCATIONS: 666 Grand Avenue, Suite 2000 Des Moines, Iowa 50309-2510 Telephone: (515) 242-2400 Facsimile: (515) 283-0231 616 Franklin Place Pella, Iowa 50219 Telephone: (641) 628-4513 Facsimile: (641) 628-8494 DISCLAIMER: No oral or written statement made by BrownWinick attorneys should be interpreted by the recipient as suggesting a need to obtain legal counsel from BrownWinick or any other firm, nor as suggesting a need to take legal action. Do not attempt to solve individual problems upon the basis of general information provided by any BrownWinick attorney, as slight changes in fact situations may cause a material change in legal result.

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